Writ petition challenging Section 73 adjudication dismissed as factual disputes and procedural discrepancies in summary forms are subject to statutory appeal under Section 107.

By | September 22, 2026
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Writ petition challenging Section 73 adjudication dismissed as factual disputes and procedural discrepancies in summary forms are subject to statutory appeal under Section 107.

Issue

Whether a writ petition under Article 226 is maintainable to set aside a Section 73 adjudication order and Form GST DRC-07 when the statutory demand-cum-show cause notice was served, and the grounds raised involve procedural defects in the electronic summary, alleged breach of natural justice, and factual disputes regarding Input Tax Credit (ITC) eligibility.

Facts

  • Period Involved: The dispute pertained to the period from July 2017 to March 2018.
  • Initiation of Proceedings: The Revenue issued a demand-cum-show-cause notice dated 22-03-2023 under Section 73 alleging wrongful/excess ITC claim against the assessee (a proprietorship).
  • Adjudication & DRC-07: The proceedings culminated in an adjudication order along with an electronic summary issued in Form GST DRC-07.
  • Assessee’s Contentions:
    • Complete non-service of SCN under Section 73(1) and summary in Form GST DRC-01.
    • Form GST DRC-07 was unsigned and carried discrepancies in quantum and period compared to the notice/order.
    • Imposition of interest and penalty traveled beyond the SCN, violating Section 75(7).
    • Violation of natural justice/opportunity of hearing under Section 75(4).
    • Valid entitlement to ITC based on tax invoices and bank payment proofs.
  • Revenue’s Stand: Service of the demand-cum-show-cause notice was duly executed, and the factual disputes regarding ITC eligibility, along with summary discrepancies, must be adjudicated before the appellate authority under Section 107.

Decision

  • Notice Served: The plea of complete absence of notice failed as the assessee’s own pleadings acknowledged receipt of the demand-cum-show-cause notice dated 22-03-2023 describing the allegations; hence, the proceedings were not without jurisdiction.
  • Electronic Summary vs. Order: Form GST DRC-07 is an electronic summary governed by Rule 142(5) and cannot substitute the adjudication order itself. Minor defects or discrepancies in the summary alone do not invalidate the underlying adjudication or deprive the authority of jurisdiction.
  • Section 75(7) & Hearing Grievances: Allegations that the order exceeded the notice or that natural justice under Section 75(4) was violated require a conjoint examination of the record, which must be evaluated by the appellate authority rather than through writ jurisdiction.
  • Factual Determination of ITC: Invoices and bank payment receipts alone do not automatically establish genuine supply or indefeasible ITC rights. These are factual aspects to be scrutinized by an appellate body.
  • Writ Dismissed: The High Court dismissed the writ petition, holding that an efficacious alternative remedy existed under Section 107 of the CGST/AGST Act, leaving all merits open for statutory appeal.

Key Takeaways

  • Service of SCN Validates Jurisdiction: As long as a substantive demand-cum-show-cause notice detailing allegations is served, minor defects in electronic summaries (DRC-01/DRC-07) do not render the adjudication null or jurisdictional.
  • DRC-07 is Secondary to Order: Discrepancies between Form GST DRC-07 and the adjudication order are procedural issues to be resolved via statutory appeal or rectification, not grounds to invoke writ jurisdiction.
  • Invoices/Bank Records Not Conclusive for ITC: Claiming ITC requires proving actual receipt of goods/services and fulfilling statutory conditions; documentary proof of payment alone does not bar revenue scrutiny.
  • Exhaustion of Alternative Remedies: Fact-heavy challenges involving compliance with Section 75 procedures or ITC verification must be routed through the statutory appellate forum under Section 107.
HIGH COURT OF GAUHATI
Ragini Communication
v.
Union of India
Arun Dev Choudhury, J.
WP(C) No. 3640 of 2025
SEPTEMBER  3, 2026
Amit Goyal, Divyansh Rathi and A. Choudhary, Advs. for the Petitioner. Ms. J. Sarmah, Adv. for the Respondent.
ORDER
1. Heard Mr. A Goyal, learned counsel for the petitioner. Also heard Mr. S.C. Keyal, learned standing counsel, GST, assisted by Ms. M Deka, learned counsel for the respondents.
2. By way of this writ petition, the petitioner, a proprietorship concerned carrying on business under the name and style “M/s Ragini Communication”, has challenged the proceedings initiated against it under Section 73 of the Central Goods and Services Tax Act, 2017 (for short, CGST Act) culminating in the impugned order dated 15-12-2023 and consequential summary in FORM G.S.T. D.R.C. 07, dated 28-12-2023.
3. The case of the petitioner, in a nutshell, is that it availed input tax credit of Rs. 6,94,877 for the period from July 2017 to March 2018, which, according to the revenue, was inadmissible.
4. The petitioner contends that ITC was duly supported by tax invoices and payments through banking channels.
It is also contended that the statutory notice contemplated by Section 73(1) was not issued; that Form GST DRC-01 was not served; that no opportunity of hearing was afforded to the petitioner; and that DRC-07 is unsigned and also contains discrepancies with regard to the period and quantum of demand.
Reliance has been placed inter alia upon the decision of this court in Construction Catalysers (P.) Ltd. v. State of Assam [2024] 168 [2025] 93 GSTL 213 (Gauhati)/WP(C) No.3910/2024.
5. The Revenue Department has opposed this writ petition by contending that the petitioner itself has admitted service of demand cum show cause notice dated 22-03-2023, whereby the allegation of excess availment of ITC was communicated to the petitioner.
It is submitted that a challenge to the entitlement to ITC involves disputed questions of fact, and the petitioner has an efficacious statutory remedy of appeal against the adjudication order.
6. The first and foremost contention of the petitioner that the order impugned in the writ petition was passed without issuance of a notice under Section 73(1) of the Act is not borne out by the pleadings or from the material placed on record.
7. Section 73(1) requires the proper officer, where it appears that tax has not been paid or has been short-paid, or input tax credit has been wrongly availed or utilized, to serve notice upon the taxable person requiring him to show cause why the amounts specified in the notice, together with interest and penalty, should not be paid.
Rule 142(1)(a) of the Rules 2017 further contemplates the furnishing of a summary of such notice electronically in Form GST DRC-01.
The statutory notice and the electronic summary of notice are, therefore, not one and the same. The requirement of furnishing a summary in Form GST-01 cannot dispense with the requirement of a notice under Section 73(1).
8. Now, let us examine, from the facts of the case, whether there was a complete absence of notice under Section 73(1).
The petitioner has specifically pleaded in the writ petition that it was served with a demand cum show-cause notice dated 22-03-2023 issued by the Respondent No. 2 alleging excess availment of ITC of Rs. 6,94,877 for the period of July 2017 to March 2018.
The petitioner has thus not merely admitted receipt of the communication; it has specifically described the communication dated 22-03-2023 as the demand cum show-cause notice and has also disclosed the precise allegation forming the subject matter of the proceeding.
Having pleaded so, the petitioner, without explaining the apparent contradiction, contended in subsequent paragraphs that no show-cause notice under Section 73(1) was issued at all.
The plea of total absence of notice, which constitutes the foundation of the challenge to the jurisdiction of the proper officer, is thus not born out of the petitioner’s own pleading.
9. It is apposite to distinguish here between a case where the statutory notice itself is absent and a case where an electronic summary accompanying an otherwise existing notice is alleged to suffer from a defect.
10. In the present case, the petitioner admittedly received the communication dated 22-03-2023 containing the allegation of wrongful availment of ITC.
11. The petitioner has thereafter placed before this Court its defense on the merits of the ITC claim. The proceeding, therefore, cannot be characterized as one in which the petitioner was called upon to answer a demand for the first time to the final order without any prior notice.
12. The contention of the petitioner as regards Form GST DRC-07 stands on a different footing.
13. Rule 142(5) contemplates the uploading of the summary of the order in Form GST-DRC-07. Such a summary cannot substitute for the adjudication order itself.
However, the petitioner has also challenged the underlying order dated 1512-2023. The alleged discrepancy in DRC-07 as regards the period or amount of demand thus would necessarily require comparison of the notice, the adjudication order, and the electronic summary.
When there is an error in the summary and it does not correspond with the adjudication order, the appropriate consequence would depend upon the nature and effect of that discrepancy.
Such an issue, more particularly in a situation when the adjudication order itself is under challenge, can be examined in the statutory appellate proceeding.
An alleged discrepancy in the electronic summary cannot, in the given facts of the present case, by itself establish that the entire adjudication was without jurisdiction.
14. The petitioner has also invoked Section 75(7) of the Act and contended that the order has traveled beyond the notice inasmuch as interest and penalty have been imposed, which were not proposed in the notice.
Section 75(7) undoubtedly places a substantive limitation upon the adjudicating authority inasmuch as the amount of tax, interest, and penalty demanded in order cannot exceed the amount specified in the notice and no demand can be confirmed on grounds other than those specified in the specified therein.
15. The contention that the order dated 15-12-2023 has traveled beyond the notice is a matter to be determined upon examination of the notice and the adjudication order together.
The mere assertion of such a violation does not, in the given facts of the present case, warrant a declaration that the entire proceedings are without jurisdiction.
The petitioner is entitled to raise this ground before the statutory appellate authority, which is competent to examine the notice, the adjudication order and the computation of demand.
16. The further contention of denial of opportunity of hearing also does not persuade this Court to exercise its extraordinary jurisdiction in the given facts of the present case.
17. Section 75(4) requires the grant of an opportunity of hearing in the circumstances specified therein. Such a statutory requirement cannot be treated as an empty formality. However, at the same time, the Court must examine the record to determine whether the alleged violation is established.
18. In the present case, the petitioner admittedly received the demand-cum-show cause notice dated 22-03-2023 and has set out a detailed defense disputing the proposed reversal of ITC before this Court, but is silent as to why a reply was not filed pursuant to the said notice before the adjudicating authority. The materials placed before this Court do not establish that the petitioner was wholly excluded from the adjudicatory process in the manner which would render the order a nullity for want of proper hearing.
Even otherwise, the question whether the procedure contemplated by Section 75 was fully complied with or not is capable of examination in the statutory appeal.
19. There is another aspect that assumes significance. The petitioner has challenged the very basis of the reversal of the ITC. It asserts that it possessed valid tax invoices and that payments were made through banking channels.
The respondents dispute the petitioner’s entitlement to the credit. The dispute as regards the statutory conditions for availment of ITC, that underlying transactions were genuine, that the goods or services were actually received, and that material produced by the petitioner is sufficient to establish its entitlements, is essentially a matter requiring examination of the factual record.
20. It is by now well settled that mere production of invoices or proof of payment through banking channels does not by itself conclude the question of genuineness of the transaction. Production of invoices and proof of payment by themselves cannot confer an indefensible right to ITC, irrespective of other statutory requirements. Such assertions depend upon the factual circumstances which are better examined by the statutory appellate authority.
21. The petitioner has an efficacious statutory remedy of appeal against the adjudication order. It is settled by a catena of decisions of the Supreme Court, including AAsstt. Commissioner (CT) LTU v. Glaxo Smith Kline Consumer Health Care Ltd. 417/36 GSTL 305 (SC)/AIR 2020 Supreme Court 2819, that although the jurisdiction of High Court under Article 226 is wide, the existence of an efficacious alternative statutory remedy is ordinarily a factor which weighs against exercise of such jurisdiction, particularly in fiscal matters.
22. As a note of caution, it is recorded that this rule is, however, not absolute. The recognized exceptions include cases involving violation of fundamental rights, breach of principles of natural justice, proceedings wholly without jurisdiction, and challenge to the virus of statutory provision.
23. In the aforesaid backdrop, this Court has examined the principal allegations of the petitioner, rather than declining interference solely on the ground of the availability of an alternative remedy.
24. For the reasons recorded hereinabove, the present proceeding cannot be characterized as one wholly without jurisdiction.
The foundational plea of absence of notice is contradicted by the petitioner’s own pleading. The petitioner has admittedly been served with demand-cum-show-cause notice dated 22-03-2023, concerning the very ITC demand which subsequently came to be adjudicated.
The remaining grievances substantially concern the correctness of the determination, the alleged discrepancy in the electronic summary, the applicability of Section 75(7), the computation of demand, and the petitioner’s entitlement to ITC, which can effectively be examined in the statutory appellate forum.
25. This Court therefore finds no sufficient ground to exercise its extraordinary jurisdiction under Article 226 of the Constitution for interfering with the impugned adjudication proceeding. The writ petition accordingly stands dismissed. Parties to bear their own cost.
26. While parting with the writ record, it is made clear that the petitioner shall be at liberty to avail the statutory remedy of appeal against the order dated 15-12-2023, if otherwise permissible in law. The questions raised on merit are left open for consideration by the competent statutory appellate authority, provided the appeal is maintainable and not time-barred.